First Gen 9-mth net drops 26% to $120M

LOPEZ-LED First Gen Corp. (First Gen) reported a 26 percent fall in net income for the first nine months of the year due to lower contributions from its geothermal and hydro operations.

In a disclosure to the Philippine Stock Exchange (PSE) on Monday, First Gen said its net income attributable to equity holders of the parent amounted to $120 million for the first nine months of 2015, down 26 percent or $43 million from the same period in 2014.

“The decline was due to lower earnings contributions from its geothermal and hydro operations, which were partially offset by higher earnings from its natural gas plants,” said First Gen.

Recurring net income attributable to the parent slipped 4 percent to $129 million from $135 million in the first three quarters of 2014.

First Gen president Francis Giles Puno said they expect to end the year with weaker contributions from their geothermal operations.

Puno, however, said this will be offset by improved dispatch from the Burgos Wind Project “with the transmission constraint addressed.”

He expressed confidence that they will continue to progress with the construction of the 97-megawatt (MW) Avion peaking plant and the 414 MW San Gabriel mid-merit plant.
The company is targeting to commission Avion by year-end and San Gabriel by the second quarter of 2016.

“We look forward to reporting improved financial performance in 2016 driven by stronger income across our clean and renewable energy platform,” said Puno.

First Gen’s consolidated revenues from the sale of electricity were relatively flat at $1.4 billion in the first nine months.

The Santa Rita and San Lorenzo natural gas-fired power plants accounted for $834 million, or 60 percent of First Gen’s total consolidated revenues.

Their revenues were 8 percent lower in comparison to their contribution of $904 million in 2014 due to lower fuel charges, although partially offset by the higher combined dispatch of the gas plants at 81 percent versus last year’s 70 percent.

The earnings contribution of the natural gas-fired plants came in slightly higher by $2 million at $92 million as of end-September 2015 mainly as a result of lower interest expenses.

Meanwhile, First Gen subsidiary Energy Development Corp.’s (EDC) revenues accounted for $524 million or 37 percent, while First Gen Hydro Power Corp.’s (FG Hydro) revenues were $35 million, or 2 percent of total consolidated revenues.

EDC’s revenues were up by $42 million or 9 percent from last year’s $482 million. The growth was mainly due to contributions from the 154.16 MW Burgos Project, the 49.4 MW Nasulo Plant, and the 140 MW Bacon-Manito Plant.

The increased revenue was, however, offset by the outage of the Tongonan Plant in Leyte in early 2015, unrealized foreign exchange losses, higher operating expenses, and the absence of a one-time reversal of impairment provision that was recognized in 2014.

As a result, EDC’s geothermal and wind income contribution to First Gen as of the third quarter of 2015 declined to $60 million from $109 million.

FG Hydro’s revenues were slightly higher by $2 million at $35 million in the first nine months of 2015.

However, the earnings contribution of FG Hydro was marginally lower at $9 million due to higher income taxes paid as its income tax holiday expired in April 2014.